Sell everything! 2016 a 'cataclysmic year,' warns RBS

If you have any money left after seven years of the Obama administration spending spree, which has added in the range of $9 trillion to the U.S. public debt, you might want to hang on.

Tight.

Because the forecasts are not looking rosy.

CNN reported that the Royal Bank of Scotland is warning that 2016 will be a “cataclysmic year” and investors should take immediate action.

Do not wait. Do not pass go, the bank warns.

“Sell everything except high quality bonds,” Andrew Roberts, told the news agency. “We think investors should be afraid.”

He pointed to the red flags for his bank – falling oil prices, an unstable China, shrinking world trade, rising debt, weak corporate loans and deflation.

In fact, in the American stock market alone, $1 trillion has vanished already in the first few days of January.

“To put that stunning figure in context,” wrote Matt Egan at CNN Money, “it’s like wiping out the combined value of the following tech giants: Google ($508 billion), Facebook ($281 billion), Intel ($154 billion), Netflix ($50 billion) and Yahoo ($29 billion).”

He continued, “No wonder there are lots of signs of rising fear on Wall Street. CNNMoney’s Fear & Greed Index is now flashing ‘extreme fear,’ a dramatic reversal from ‘neutral’ just two weeks ago.”

Roberts, of the Scottish bank, said the world is in a global recession, and this “terrible cocktail” means investors may hope to obtain a “return of capital, not return on capital.”

Just getting their investment back, the report suggested.

“RBS compares the market mood with that of 2008 before the collapse of Lehman Brothers and the start of the global financial crisis,” the report said.

The report pointed out that back in 2008, at least there was China to stimulate the world economy. But that’s not available now.

RBS “warns that without allowing a massive devaluation of its currency – around 20 percent – China can be of no help.”

The report said the China bank spent $500 billion to prop up its currency just last year.

That’s the same path that the U.S. took with its QE, quantitative easing, programs, courses that even one former Fed banking executive said went too far.

In short, “The Fed is a giant weapon that has no ammunition left,” he said.

He said a “correction” of 20 percent wouldn’t be surprising and most astute managers are “building cash positions,” he said.

Credit to WND
Read more at http://www.wnd.com/2016/01/sell-everything-2016-a-cataclysmic-year-warns-rbs/#dBItTvgoOd7Mk3XV.99